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Funding and Feasibility

Major investments of any nature – particularly infrastructure investments – require a system of funding that provides the money up front in a lump sum, or at least provides certainty that the incremental installments will be allocated. Our current system provides neither. The research cited the McAlpine Lock and Dam project on the Ohio River, near Louisville, and how it received, on average, only 61% of full capability funding levels. The study identifies how such an unpredictable and insufficient funding stream resulted in a 38% cost escalation and a project completion delay of 6½ years.

The analysis further examines the feasibility of instituting a bonding style approach to lock and dam financing. If implemented, priority projects could achieve greater funding in an initial lump sum – decreasing the likelihood of the cost overruns and delays pandemic among our lock and dam system. “Our research highlights that how you allocate money is just as important as how much money is allocated,” explains Steenhoek. “A bigger check from the government is not the only solution. Better stewardship is also essential.

“The other major principle advanced in our analysis is that a predictably good inland waterway system is better than a hypothetically great one,” says Steenhoek. “During this period of fiscal scarcity, we are concerned that our nation is failing not only in providing new and expanded locks and dams, but also in maintaining and preserving our current inventory. A preferable approach may be to first demonstrate stewardship of current locks and dams by providing assurance to users that a lock and dam, in the event of a major failure, will be operational within 48 or 72 hours, for example. If we allocate our resources in a manner that provides this degree of predictability to those who utilize our inland waterway system, we believe that will provide a superior message to the one we are currently sending.”

According to the research, the cost of one lock construction project ($376.8 million) is approximately equal to the cost of nine major rehabilitation projects ($40.7 million). If each of the nine new construction/expansion projects currently underway were downgraded to a major rehabilitation, their total cost would drop to $366.3 million compared to the listed total of $3.2 billion – a difference of $2.8 billion.

Steenhoek explains, “We recognize this is a departure from the longstanding promotion, among agriculture and other stakeholders, of new, expanded locks with auxiliary chambers. We share this desire, but the question we posed ourselves is, “Is continuing this strategy likely to yield results, or will it simply perpetuate the lack of progress we’ve witnessed for years?”